World equity and bond markets fell in recent weeks, and although equities have recovered somewhat since, the episode is a reminder that expensive equity, bond, and bond-proxy prices are at risk from the end of ultra-low cash and bond yields...

The outlook for the world economy continues to strengthen, particularly in the formerly moribund eurozone, and it provides greater support for growth-oriented assets. But valuations remain expensive across all asset classes...

World equity markets have continued to recover from their North Korea related setback in August/September. Income-oriented asset classes (property, infrastructure) have lagged as the prospect of higher bond yields draws nearer.

World financial markets have become less concerned about North Korean risk. Equities have largely recovered from previous setbacks, and “safe haven” buying of government bonds has eased back.

World equity markets — despite a setback at the outbreak of acute tensions over North Korea — have continued to make progress as the world economy continues to improve...